A cycle count is an inventory management procedure where a small subset of inventory is counted on any given day while business continues around it. Cycle counts are less disruptive to daily operations, provide an ongoing measure of inventory accuracy and procedure execution, and can be tailored to focus on items with higher value, higher movement volume, or that are critical to business processes. So needless to say, having regular cycle counts of your physical inventory is vital for your business, but this is easier said than done.
For all of its benefits, there is one logistical problem which makes cycle counting more difficult than a complete inventory. That problem is material movement. Think of the environment that exists when you conduct an annual physical inventory:
- All stock receipts have been placed in their proper bin location.
- All printed sales orders and transfers for stock material have been filled.
- Computer records for these receipts, sales orders, and transfers have been updated.
- All customer returns have been processed and the material returned to stock.
- No customer orders are filled nor material moved until the counting of all products in the warehouse is completed
All material movement has stopped. You are counting a fixed target. Cycle counting is more like trying to count a moving target and is much more difficult to maintain.
Microsoft Dynamics® NAV improves inventory management and makes cycle counts easier in the following ways:
- Provides easy, real-time visibility into inventory, sales, purchasing, and financial information across multiple locations.
- Accurately tracks shipping and delivery of parts by integrating Automatic Data Collection (ADC) functionality with enterprise resource planning (ERP).
- Maintains accurate real-time inventory data and optimize layout, picking methods, and movement.
- Creates accurate demand forecasts.
Finatech, a Microsoft Gold Certified Partner, is a global IT services provider delivering technology-driven business solutions that meet the strategic objectives of our clients.
By Omar Sary with Finatech, a California Microsoft Dynamics NAV Partner